Associations vote to dissolve Florida-based Regional MLS

Decision follows lawsuit by 1 of 3 MLS shareholder associations

Andrea V. Brambila Associate Editor

Jun 28, 2013

The board of directors of Jupiter, Fla.-based Regional Multiple Listing Service Inc. has voted to dissolve the 11,000-member MLS following the settlement of a lawsuit filed by one of its shareholder associations.

Regional MLS members are now receiving all MLS services directly through their respective associations: the Realtors Association of the Palm Beaches, the Jupiter-Tequesta-Hobe Sound Association of Realtors, and the Realtors Association of St. Lucie.

The dissolution of Regional MLS, which was formed in 1987, is expected to be finalized sometime this summer.

In April, the Jupiter-Tequesta-Hobe Sound Association of Realtors filed a complaint against Regional MLS and its other two shareholder associations, alleging false and deceptive advertising, unfair competition, and interference with business relationships.

The origins of the suit lie in a change in billing structure made by Regional MLS’ board around November 2012. Whereas previously Regional MLS had provided the three associations with MLS services directly, the board voted to allow each association to offer MLS services separately, using a common database provided to the associations by Regional MLS, and thereby making the associations competitors for MLS subscribers, the complaint said.

Gary Nagle, general counsel for the Jupiter-Tequesta-Hobe Sound association, declined to elaborate on the complaint, saying it “speaks for itself.”

He did say the suit came to an “amicable resolution” through a mediated settlement.

“The terms of the settlement are confidential and the directors of the MLS voted to dissolve after the settlement was reached,” Nagle said.

Donn Wonderling, president of the Realtors Association of St. Lucie and, until the dissolution was announced, vice president of Regional MLS, declined to comment on whether the decision to dissolve had anything to do with the lawsuit.

“There was a lawsuit but that was not a primary factor in the dissolution,” he said.

Wes Wiggins, general manager of Regional MLS since June 2011, declined to comment for this story, saying, “Upon advice of counsel, I will not be able to discuss the dissolution.”

Bonnie Lazar, Regional MLS’ president, also declined to comment.

Regional MLS posted a notice on the home page of its website on Monday.

Wonderling said the idea of dissolving Regional MLS had been around for many years. Although the final shareholder vote was taken just recently, the board started the dissolution process about a year ago, he said.

The dissolution process included having associations take over some of the responsibilities previously held by Regional MLS, including training, Supra lockbox sales and servicing, and billing.

“Regional MLS was a duplication of effort. The shareholder associations all have staff, and to create another entity was really a waste of resources,” Wonderling said.

“The large centralized government that we’ve created with Regional MLS was a drain on members’ dues, and we saw an opportunity to end that situation and reduce costs and we took it.”

Carol Van Gorp, CEO of the Realtors Association of the Palm Beaches, said members can be better served by the associations they belong to.

“We have had a big gulf between what the association does and what the Regional MLS does for a long time. This way we will be able to align training and education with compliance and … standards,” she said.

Previously, “we were the ones doing education and training, and they (Regional MLS) were the ones doing the fining. That doesn’t make sense,” she said, adding that members had had to pay $115,000 in fines about two years ago.

Van Gorp said she thinks the change will make MLS services more effective and help lower costs for members.

“(We had) two receptionists, two chief financial officers, a whole slew of special assistants or MLS specialists answering the same types of questions. Our members never knew who to pay, who to get mad at, was it something the association did, (or) something that Regional did,” she said.

Several of the Regional MLS staff — 10 of about 27 — has been incorporated into the staff of all three associations, she added. Nagle said “there may be an announcement about” staff absorptions shortly, but did not comment further.

Wonderling said the Realtors Association of St. Lucie has already been able to lower member dues. Van Gorp said the Realtors Association of the Palm Beaches hoped to lower MLS fees “once we have a true picture of what our costs are.”

With the latest spring round of MLS fee billing, “we already have gotten rid of office participation fees and (MLS) application fees for new members and transfer fees. So there already has been a significant savings that we’ve seen,” Van Gorp said.

Wonderling said members have been reacting to the change “very positively.”

“In fact, when it came up at our association meeting recently it was met with cheers. We get rid of a duplication of effort, duplication of staff, duplication of services, and by doing that create a more efficient system that wisely uses its members’ money,” he said.

As a result of the dissolution, each association will operate its own independent MLS system, though they will continue pooling their listing data.

“The same base information will be available on each association system. There may be additional features that each association offers or doesn’t offer, and the terms of those additional features can be offered at different prices and different terms,” Nagle said.

The change allows the Realtors Association of St. Lucie to “take better control of our destiny (and) explore the other options out there,” particularly in terms of technology, Wonderling said. He declined to comment on how new products would be chosen.

All three MLS systems will be using the flexmls platform from FBS. Regional MLS, which had previously been on CoreLogic’s MLXchange platform, announced in November 2012 that it had chosen flexmls as its new provider.

“Our contract was up and we had change in our future no matter what,” Van Gorp said. “It gave us an opportunity to look at what was on the market, so we selected flex. Their ability to work with all browsers and to work with iPads, which are so prevalent now, combined with their outstanding customer service swayed (us).”

On June 17, the flexmls platform went live for all three associations.

Michael Wurzer, president and CEO of FBS, was quick to point out that Regional MLS’ choice of MLS vendor was completely separate from any issues involved with the organization’s governance structure and its decision to dissolve.

The company now has three separate contracts with each association rather than one with Regional MLS, but otherwise the dissolution didn’t impact the technical aspects of the transition, which had been going on for six months, Wurzer said.

Regional MLSs have become the norm in many big metros, and Realtor associations seeking economies of scale have also pursued mergers in Miami, Chicago and Denver.